Growth in Palau is expected to rise as the economy recovers from the drop in tourist arrivals in 2016, according to the new Asian Development Outlook (ADO) 2017.

In the report, Palau ‘s economy is estimated to  grow by 3.0% in FY2017 and 5.5% in FY2018 with tourism as the driver of the growth, as tourism arrivals is expected to recover from a decline in numbers due to the decrease of  “low- value” tourists.


The report also said the growth will be bolstered by new resort hotels and   public investments in water supply and sanitation supported by development partners.

The economy will also benefit from the new tourist fees Palau will implement this year. the $100 Pristine Paradise Environmental Fee (PPEF).

ADB reiterates Palau’s need to seek high-value tourism policy as the low-value package tourism contributes little to the economy as they spend less money on the island.

“Palau needs to establish a clear and shared vision toward high-end tourism. The lack of a long-term development strategy is eflected in the composition of public spending.” the report stated.

Even with fiscal balances in surplus since FY2011, public investments declined to the equivalent of 4.4% of GDP in FY2013–FY2015, less than half of the average of 9.2% maintained in FY2000–FY2012.

In the same report, ADB said Pacific economies face gradually improving growth prospects in the next 12 months on the back of stronger economic fundamentals,

The report projects Pacific economies will, on average, grow 2.9% in 2017 and further 3.3% in 2018, as the region’s larger economies recover from recent slowdowns and shocks.

Xianbin Yao, Director General of ADB’s Pacific Department. “While growth in most of the ADB Pacific member countries for the near term is positive, there is no room for complacency and vigorous policies to sustain economic activity still need to be implemented.”

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. [/restrict]